Lagos, NG • GMT +1
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Thursday, December 24, 2020 / 7:45 AM / By Zedcrest Capital / Header Image Credit: Egypt Independent
Activities at the FGNbond space remained slow as yields continue to weaken D/D, with bids/offerswidely dispersed on most of the benchmark maturities. The bears are gettingdesperate in the market, scrambling for any possible bids to offload theirbonds. Offers were bettered at the belly of the curve, climbing approx. 15bpsfrom yesterday's level while at the tail of the curve, we saw rates jump by40bps with offers ranging between 7.80%-7.90% levels. Bids adjusted slightlyacross the curve, consequently expanding by c.4bps.
We expect to seesustained supply in tomorrow's session, albeit weak demand, as the marketslides into the holiday mood.
| Benchmark FGN Bonds | ||||
| Description | Bid (%) | Offer (%) | Day Change (%) |
|
| n16.39 27-Jan-22 | 2.52 | 0.35 | (0.54) |
|
| 12.75 27-Apr-23 | 4.11 | 2.52 | 0.61 |
|
| 14.20 14-Mar-24 | 4.47 | 3.01 | (0.03) |
|
| 13.53 23-Mar-25 | 5.26 | 2.99 | (0.24) |
|
| 12.50 22-Jan-26 | 6.01 | 5.00 | (0.01) |
|
| 16.29 17-Mar-27 | 6.50 | 5.24 | (0.01) |
|
| 13.98 23-Feb-28 | 6.50 | 5.31 | 0.00 |
|
| 14.55 26-Apr-29 | 6.69 | 5.81 | (0.31) |
|
| 12.15 18-Jul-34 | 7.80 | 7.33 | 0.00 |
|
| 12.50 27-Mar-35 | 7.80 | 7.35 | 0.00 |
|
| 12.40 18-Mar-36 | 7.80 | 7.33 | (0.01) |
|
| 16.2499 18-Apr-37 | 7.81 | 7.30 | 0.02 |
|
| 9.80 24-Jul-45 | 8.50 | 7.18 | 0.00 |
|
| 14.80 26-Apr-49 | 8.50 | 7.55 | 0.00 |
|
| 12.98 27-Mar-50 | 8.50 | 7.55 | 0.00 |
|
Treasury Bills
Activitypicked up in the treasury bills market as we saw short-dated bills (Jan-April)become popularly demanded. This may be attributed to the SWAP and OMOmaturities for the banks that hit the system. Most of the short-dated billswere initially quoted at 0.40% but slide by approximately 20bps as their demandincreased. We also saw interest in the CBN special bill sold to banks that wasmatched with adequate supply to fill the few market demand.
On theother hand, the mid and longer-dated bills saw no joy in today's session asmarket participants shrug-off the urge to trade at that end of the curve.
We expectthe markets to slow tomorrow as the market generally slides intoChristmas/holiday mood.
| |||||
| Benchmark OMO Bills | |||||
| Description | Bid (%) | Offer (%) | Day Change (%) | ||
| NGOMOB 0 01/05/21 | 5.00 | 0.15 | 0.00 | ||
| NGOMOB 0 02/02/21 | 5.00 | 0.20 | 0.00 | ||
| NGOMOB 0 03/02/21 | 5.00 | 0.20 | 0.00 | ||
| NGOMOB 0 05/11/21 | 6.00 | 0.30 | 0.00 | ||
| NGOMOB 0 06/08/21 | 6.50 | 0.30 | 0.00 | ||
| NGOMOB 0 08/10/21 | 6.50 | 0.35 | 0.00 | ||
| NGOMOB 0 09/07/21 | 6.50 | 0.50 | 0.00 | ||
| NGOMOB 0 10/19/21 | 7.00 | 0.50 | 0.00 | ||
| Benchmark NTBills | |||||
| Description | Bid (%) | Offer (%) | Day Change (%) | ||
| NIGTB 0 12/31/20 | 5.00 | 0.15 | 0.00 | ||
| NIGTB 0 01/14/21 | 5.00 | 0.15 | 0.00 | ||
| NIGTB 0 02/11/21 | 5.00 | 0.20 | 0.00 | ||
| NIGTB 0 03/11/21 | 5.00 | 0.30 | 0.00 | ||
| NIGTB 0 04/29/21 | 6.00 | 0.30 | 0.00 | ||
| NIGTB 0 05/13/21 | 6.00 | 0.30 | 0.00 | ||
| NIGTB 0 06/10/21 | 6.50 | 0.35 | 0.00 | ||
| NIGTB 0 07/01/21 | 6.50 | 0.35 | 0.00 | ||
| NIGTB 0 08/26/21 | 6.50 | 0.35 | 0.00 | ||
| NIGTB 0 09/09/21 | 7.00 | 0.50 | 0.00 | ||
| NIGTB 0 10/14/21 | 7.00 | 0.65 | 0.00 | ||
Money Markets
System Liquidity jumped byapproximately 165.92%, supported by SWAP/OMO maturities credited into thesystem. The market opened the day at c.N751.80 causing OVN rates to dropfurther by c.13bps as OBB and OVN rates closed the day at 0.50% and 0.75%,respectively.
We expect the market to remain stableat these levels tomorrow as there no immediate funding needs that would reversethe low levels of rate.
| Money Market Rates | ||
| | Current (%) | Previous (%) |
| Open Buy Back (OBB) | 0.50 | 0.50 |
| Overnight (O/N) | 0.75 | 0.88 |
FX Market
IEFX window dropped by N2 despitethe apex bank slowing down in FX's supply in that window. Quite a significantvolume passed through the space today (c.S117m) with bid rates ranging betweenN386/$1-N396/$1.
However, all the other marketsegments remained relatively stable for a 3rd consecutive.
| FX Market | ||
| Current (N/$) | Previous (N/$) | |
| CBN Spot | 379.00 | 379.00 |
| CBN SMIS | 380.69 | 380.69 |
| I&E FX Window | 392.00 | 394.67 |
| Cash Market | 475.00 | 475.00 |
| Transfer Market | 490.00 | 490.00 |
Eurobonds
TheNIGERIA Sovereign tickers had abullish session today, supported by the slight recovery in crude oil prices,which initially dropped below $50. We also saw a little demand from localparticipants, consequently causing yields to fall by an average of c.4bpsacross the sovereign yield curve.
TheNIGERIA Corporate tickers werealso bullish, most especially the SEPLLN 22s, which strengthened by 17bps.
1. Fixed Income Yield Continue to Weaken as Market AppetiteWither
2. A Rather Drab Day inThe Fixed Income Space
3. Flat Performance inNT-Bills Secondary Market as Average Yield Hovers Around 0.4%
4. Market Appetite forFixed Income Securities Remains Weakened
5. December 2020 FGNBond Auction Oversubscribed - DMO
6. FX NEWS: The ApexBank continues to support the market by selling into IEFX window
7. BUACEMENT ObtainsSEC's Approval for Book Building on Bond Issuance
8. Summary of FGN BondAuction Results for December 2020
9. Weak Bond Auction asDMO Hiked Rate by an Average of 158bps
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